MOSCOW: Russian Central Bank authority slashed interest rate by 100 basis points to 14 percent from 15 percent which comes as relief in business sector.
The Central Bank said Russia’s weak economy is quelling inflation on its own.
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“The balance of risks is still biased towards a significant slowdown of the economy,” the regulator said after the decision was published on Friday, March 13.
“According to Bank of Russia forecast, the current monetary policy and low economic activity will be conducive to the slowing of annual consumer price growth to 9% over the year (March 2016 on March 2015) and to the target of 4% in 2017. As inflation risks abate, the Bank of Russia will be ready to continue cutting the key rate,” the CBR said.
Cutting the rate appeals to the pro-business lobby in Moscow which has been pushing for lower rates so businesses can continue to grow and develop, which they argued was impossible when the rate was 17 percent.
On Wednesday, Andrey Kostin, CEO of Russia’s second biggest bank VTB, called for the Central Bank to lower the main rate by at least 100 basis points.
